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Somewhere between 30 million and 60 million Americans have limited or no access to banking services. A good portion of this group will be due refunds when they file their federal and state tax returns in the coming months.

Typically, this is where payday lenders come in, cashing that government check for the customer and charging a percentage of the refund for the service. But this year there's a new cashier competing for the same business: Walmart (WMT).

Walmart is pitching flat-rate check cashing (available in 47 states as of this writing) for the unbanked: $3 to cash refund checks of $1,000 or less, and $6 for checks up to $7,500 in value.

The potential savings? Up to $90 on the average tax refund of $2,902, Walmart says.

Banks Don't Want This Business

If Walmart's move strikes a chord with customers, it's because banks are less willing to cater to low-income earners than they once were. Regulators have either limited or eliminated overdraft and other fees that at one time were used to subsidize low-balance accounts.

This why "free" checking accounts are getting harder to find: MoneyRates.com reports that only 34.3% of checking accounts are free of fees and minimum balance requirements. The other 65.7% may not be an option for those who live paycheck to paycheck.

In pitching its own services, Walmart argues that the unbanked tend to bear an unfair burden when it comes to services fees. "We believe Americans shouldn't have to pay exorbitant prices on their everyday financial needs," said Daniel Eckert, vice president of Walmart Financial Services, in a press release. "It's their money and we want to make sure they can cash checks, pay bills and transfer money at a low price."

How People 'Bank' Without a Bank

Tax season brings the problem of affordable banking into sharper relief.

The Treasury Department is preparing to mail out an estimated $31 billion in refunds. Most of us won't think twice when we deposit that money into our accounts -- or have it directly deposited for us. The unbanked, though, not only have to pay to turn their refund check into currency, they get charged every single time they want to cash or write a check, or access any banking service.

Cash cards are like checking accounts in that they have account and routing numbers, and can therefore accept direct deposits. You can also use cards to pay rent, utilities, and other necessities online. The cards themselves act like any other bank debit cards when you use them while shopping.

Walmart is teaming with prepaid card vendor Green Dot (GDOT) to offer MoneyCard, which can be purchased and reloaded either online or in stores. Direct deposits to active accounts cost nothing, though check-cashing fees may apply.

Rival vendor NetSpend Holdings (NTSP) also pitches its prepaid cards as easy vehicles for the unbanked to get access to their tax refunds. Both firms have seen revenue increase more than 20% annually over the past two years as the number of unbanked individuals has risen to 7.7% of the U.S. population, according to FDIC estimates.

The Perils of Prepaid Cards

Sound good so far? Prepaid cash cards are certainly better than giving a percentage to a payday lender. Yet failing to maintain a bank account also has drawbacks, starting with restrictions.

Walmart's check-cashing policy is limited to payroll checks, government checks, tax refunds, and Walmart-issued MoneyGram money orders. You'll still need a payday lender for personal checks and other payments.

Prepaid cards can also become expensive. Cards typically come with spend and deposit limits, and reloading typically costs money, especially if you're reloading with a paper check that needs cashing. In the case of Walmart's card, ATM transactions cost $2 each while a standard reload costs $3. There's also a $3 monthly fee for carrying the card.

So while I applaud Walmart's intent -- the unbanked can use all the help they can get -- don't view these services as a panacea, nor even a long-term substitute for a good checking account. You'll probably pay less over the long run by going with a traditional banking partner. You'll also get access to low- or even no-limit savings accounts as a bonus for putting yourself on the path to financial freedom.

Are you using a prepaid cash card? If so, what has your experience been like? Please let us know using the comments box below.

Motley Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and past columns. The Motley Fool owns shares of Walmart. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Walmart.

Timing Your Spending

TurboTax Articles

Common lifestyle changes, like getting a job or getting married, can change your tax liability. To avoid being caught off guard by an unexpected tax bill or huge tax refund, you'll need to adjust your withholdings on your paycheck.

If you're a homeowner, you probably qualify for a deduction on your home mortgage interest. The tax deduction also applies if you pay interest on a condominium, cooperative, mobile home, boat or recreational vehicle used as a residence.

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mtanyasmail

Just thought I would let everyone know (haven't read ALL the posts here so maybe this has already been posted, but just in case), WalMar will NOT cash your IRS refund check unless it is $2500 or under. We just found this out the hard way when my daughter who is over 18 but doesn't have a bank account wanted to cash her almost 4k check. We were VERY angry when this information is not posted ANYWHERE on their website and it wasn't until we drove all the way to the nearest store, which for us is almost a half hour, and found it out there. I think someone should make sure that they post this on the site, because it is misleading. When I called to see if this was an "every store" policy they said yes. We had already tried to have her sign over her check to us to deposit it into our account which also didn't work. I think that is SO stupid. Anyway, apparently Walmart was cashing larger checks, but only until a couple weeks after April 15. Okay, so since many many people do wait until the last minute and didn't get their checks until recently that really limited the amount of people they were "helping". whatever. I am steamed right now. SO, now she has to go and open an account, which is really better anyway, but still....

Since I am making much less money this year I was concerned that I wouldn't be able to get the kinds of gifts I usually get for my family this year. I thought I would try one of the penny auction sites because I heard that they have the best deals anywhere. I checked out a few sites and it became clear to me that the one that was most reliable and had the lowest prices was at ( http://tinyurl.com/TopBargains ) . To be honest, their prices seemed too low to be true. I tested them out by bidding on an iPad, which my son wanted, but I didn't think I could afford one this year, to my surprise and delight I ended up getting one for $73. I got it about a week ago and it was brand new and in a sealed box.

While it sounds great about the Wal Mart cards to a lot of folks. I just wish to point out that there is no Wal Mart bank. The accounts are handled through a bank located in California. That bank charges a "MONTHLY" handleing fee of $3.00 per month, even if your account happens to have less than the three dollars in it. Sooo be careful or folks you could be faceing over drawen fees as long as your account is active. I am one of the lucky ones who has his own and do not have to worry about it. However, if you wish to have one of these accounts written about in the above article, be prepared to have $3.00 deducted from it "EVERY" month. Just some words of wisdom to those who can not afford to GIVE money away to a bank in California each month.

My husband and I have been using a walmart money card for a while. His check is direct deposited to the account so we don't have to pay a fee to load the card, and we deposit more that $1,000 a month so the $3 monthly fee is waived too. Any bills I can't pay online with the card, such as rent, I go to walmart or the post office and buy a money order using my card to pay. So far I've only found 1 store where my card won't work.

This is crap.... at least in Florida it is. Walmart will no longer cash any check , government or otherwise, that is over $2,000 in the state of Florida. All of those people without checking accounts are SOL, as are those people in a hurry to cash their checks on the weekends for less ,when the banks aren't opened, as we learned , painfully, this weekend.

The system will work when people use planning tools to determine their tax liability and make adjustment accordingly.You don't owe by virtue that you make money. How many withholding are on your w-4? How much money do you pay each pay period? Do you take money out of accounts with penalties? If you are self employed, do you pay estimated quarterly taxes? What is your filing status? I could go on and on but I think you get the picture.